Monday, June 27, 2011

Marketing for a startup is different than anything you may have done before. It’s different from the big-company and/or traditional marketing many executives may be used to, and a whole new challenge for entrepreneurs who don’t have a background in marketing to begin with.

The way startups need to market themselves is as unique as their product, service, market and target customer. But there are several mistakes many new startups consistently make.
Whether you’re managing a startup, managing marketing for a startup, or even consulting for a startup, here are seven common mistakes to avoid.

1. Hiring a PR firm too early

PR is sexy. It’s exciting to see your name in print, to have others talking about you, to have articles framed on the wall and shared with investors. And PR can be an important component of early marketing strategy for some startups. But hiring a full PR firm might not be the right answer, at least not yet.

Your initial PR efforts should be organic. They should stem from self-published channels and social networks, spread via employees, investors and customers directly. Executing on this opportunity requires a smart strategy and well-understood messages & objectives, and may very well require some outside help to coordinate. But early-stage startups can typically achieve these objectives and save money in the process by working with an independent socially-adept PR consultant who can help coordinate the internal and organic efforts that will drive early PR momentum.

2. Overthinking brand

I’ve seen countless startups obsess about their brand at the expense of the business. They build thick brand guidelines before they even have something to monetize or sell, and fuss over the logo instead of empowering the sales team.

Early startup marketing strategies need be executed with a bias for action, sales and revenue. If the color palette is slightly different for the email campaign vs. the trade show banner, nobody except a handful of insiders and others with too much time on their hands are going to notice and care.

Brand is important, brand consistency is important. But shipping, testing, moving fast and driving customer behavior and monetization is more important. If you can’t drive revenue and grow the business, that brand binder isn’t going to mean a thing.

3. Starting with a marketing budget

Startups should have to earn their marketing budget. They should operate with the assumption that there’s no money for marketing, and instead focus initially on the scrappy, organically-generated ways to drive customer awareness, demand and closed business.

We live in a world where our customers can be a powerful marketing channel, where countless free tools exist for us to be effective publishers with good content, where a good product and great value can create inbound demand that supersedes the need to pay the expensive, traditional marketing “tax”.

You may eventually start spending money to accelerate your opportunity. But if you start by spending money, there’s little incentive or motivation to first figure out what can drive the same performance and results with far less investment.

4. Taking strategy or tactical cues from competitors

If you’re doing it right, you’re obsessed with your competitors. You’re watching everything they do – from product updates to Web site changes to what their low-level employees are tweeting. And when you get a link from an investor to something that a competitor did that you’re not doing, your first reaction may be to scramble to catch up.

Resist that temptation. Use your competitors as a source of ideas, but filter them through your own objectives, priorities and needs. What’s good for your competitor may not work for your business. And what competitors are doing, launching or trying today may fantastically fail. If you’re doing it just because they did it, you’re distracted from the work that will more directly drive your unique business forward.

5. Letting interns driv\e the social media plan

Would you let a college student run your customer service department? Would you put them on a panel at an important customer event? Would you trust them to serve as the voice of your business directly to current customers, prospects, future investors and more?

Interns may be more socially-savvy than you, they may have more time to execute, they may have great ideas. But they by definition aren’t going to be around for long, they aren’t as invested in the business as you are, and anything they start that you can’t sustain when they leave is wasted work, or worse. Countless blogs, Twitter accounts and Facebook fan pages sit dormant since the intern left, making the company look like it stopped doing business. Don’t be that company.

6. Allowing adversarial relationships with sales and biz dev

It’s ridiculous that businesses big and small allow an adversarial relationship between marketing and sales to persist. It’s more ridiculous for marketers in today’s environment to fail to hold themselves accountable for measurable performance and revenue traction.

Sales and biz dev may close the deal, but marketing can set the table. Marketing can have a direct impact on driving larger sales pipelines, more business development opportunities, and faster revenue ramp. If sales, marketing and business development have the same goals, and are measured based on their individual and collective performance against measurable revenue-based outputs, it’s far more likely that they’ll work together.

There’s no reason that marketing can’t drive this process. And if you run the business, put common metrics & expectations in place and expect this level of collaboration to take place.

7. Impressing board members & investors instead of customers

Your board and investors are important constituents, no question. They’ll have lots of opinions and ideas. But it’s your job to filter those ideas through the eyes of your customer and your target market. Not every idea is going to work, not every idea is even worth testing.

And if you explain your rationale back to the originator with a thoughtful, customer-driven response, I guarantee your board and investors will greatly appreciate that you didn’t waste your time (and their money) on something that was less likely to work.

Thursday, June 23, 2011

This is an interesting article that has some merits. Where mistakes happen to every manager new or old dogs, the ability to learn, adapt and keep energy levels high are important factors. I hope you enjoy this article from Steve Tobak

Inexperienced execs may make mistakes — but the smart ones will learn from those mistakes and pick up sound strategies from seasoned leaders. Here’s some advice to get you on the right track.

I’ve worked with and consulted for hundreds of startups, entrepreneurs, and relatively inexperienced management teams. I also was an inexperienced executive myself, once upon a time. Lots of water under the bridge, I can tell you that.

Now, I wouldn’t begrudge anyone the unique growth experience of learning from his own mistakes, especially the wisdom and humility that only failure can impart on the executive ego.

That said, savvy managers listen to the voice of experience. They may choose to ignore the advice, but they still listen. Information is power, forewarned is forearmed, and all that.

When asked in a CNBC interview what keeps her up at night, Christine Day, CEO of fast-growing, high-flying athletic apparel maker Lululemon Athletica, said, “Scaling the growth. Our growth has been phenomenal, and that puts a lot of pressure on a young management team.”

Day, who spent 20 years at Starbucks, most recently as president of the Asia Pacific Group, knows her stuff. Scaling the business is on my list of novice management pitfalls, along with nine other rookie mistakes.

1: Thinking you’ve got it all figured out

Or thinking that the answers are self-contained within your four walls. One of the biggest differences between mature execs and novices is the understanding that the management team and the board do not have all the answers. Source far and wide, debate, then make decisions.

2: Failing to say no to opportunities

One of the biggest pitfalls is taking on too much, starting too many projects, spreading resources too thin, and failing to focus on what’s most important: execution and growing the core business.

3: Staying the course too long

Entrepreneurs often stay the course when there are clear signs that they’re pointed in the wrong direction — for instance, customers want B instead of A, customer traction isn’t happening as planned, or the market isn’t materializing.

4: Hiring other inexperienced executives

If you’re scratching your head and wondering how dumb is that?, you’re not alone. I can never figure out why entrepreneurs do this, but they do, and their boards, VCs and all, let them. It happens all the time. The result: the blind leading the blind.

5: Hiring executives just for their experience

All too often, entrepreneurs know they need to complement their relative inexperience with executives who’ve been around, so they hire people with big corporate backgrounds and overlook key qualities, like how well they’ll do in a fast-paced, collaborative, entrepreneurial environment.

6: Underscoping the challenges of scaling the business

This is huge for high-growth companies where it’s critical to scale the operation — human capital, IT infrastructure, processes, facilities, equipment — in sync with growing demand. It’s a real tightrope to simultaneously maintain growth, quality, and profits.

7: Failing to moderate risk-taking

In an effort to maintain the entrepreneurial spirit that got them where they are, inexperienced executives will oftentimes shy away from organizational processes and systems that are needed to facilitate growth. That often results in a shoot from the hip mentality or, even worse, a constantly shifting strategy du jour.

8: Suddenly becoming overly risk averse

Clamping down on calculated risk-taking based on sound risk-reward analysis is just as bad an idea as playing it fast and loose. In today’s highly competitive global market, playing it safe won’t help you maintain market share. Quite the opposite is true.

9: Lacking marketing competence

All too often, especially in the technology industry, marketing competence is an afterthought. Executing on the product or service and customer traction are the keys for startup success, no doubt, but marketing intelligence will improve the odds. Finding competent marketers seems to be the rub.

10: Going public too soon

There are benefits to an IPO — primarily as a source of capital and currency for acquisitions. But the downside — SEC and public scrutiny, Sarbanes Oxley, and most important, management team distraction — can negatively affect a company’s ability to execute when it needs to be firing on all cylinders.

The flip side

In light of all that, you’d almost be tempted to avoid inexperienced entrepreneurs and executives. But that, my friend, would be a mistake. Anecdotally speaking, those with experience don’t necessarily do any better than their novice counterparts. I guess experience has its own pitfalls. Hmm … sounds like a subject for another blog post.

Monday, June 20, 2011

When it comes to selling, I am terrible at it. If you told me to convince you to buy a red plastic cup, I wouldn’t be able to. But if you told me to sell Walmart a million of these red plastic cups, it’s very likely I would be able to.

Over the years I learned that although I suck at selling products to individuals, I am great at closing big deals with businesses. As an entrepreneur I have closed deals ranging from $240,000 a year to even $1,200,000.

Aside from knowing what you are going to sell, here are the 5 tactics you must use if you want to close big deals.

Step #1: Create a Bond

People like doing business with those they can relate to. If you are going to spend money, why not spend it on people you like, right?
The best way to get people to relate to you, and your product, is to create a bond. You can do this by telling stories, or just “shooting the shit”.

One thing I like doing is to talk about my past experiences. I tend to talk about my childhood or teenage years. Once I do this the other person usually feels comfortable enough to talk about their life experiences.

The whole purpose of doing this is to get to know the other person on an intimate level. At the same time, they’ll quickly feel like they’ve known you for years, when in fact… you’ve just met.

Step #2: Be Logical

The tactic I use most often when trying to close a big deal is logic. If a company is spending $100,000 with someone else and you can do the same thing for $50,000 while still maintaining a healthy profit margin, why not talk about how you can save them $50,000 every year?

In addition to saving others money, I always try to talk about how my services and products create better results than the competition. Through the use of case studies and testimonials, you can easily achieve this.

Another tactic you can utilize is to break down how much additional revenue you can provide a company. A logical tool I have found useful is called, “effectuation.” For example, I once did a pitch to Blue Nile and broke down how I can drive much more traffic to their website, what percentage of those visitors would convert into customers, and the average revenue/profit per new customer. This helps increase their growth rate and would potential cause their stock price to go up.

Step #3: Change Their Mood Not Their Mind

Although logic is great, not everyone bases their decisions on logic. Many people are motivated by emotional triggers. Instead of trying to change a person’s mind, start trying to change their mood.

Lets say I am offering companies a tool that helps them increase their revenue through conversion optimization. Through logic, if I am not able to convince you to use my tool, I’d figure out a way to change your mood. Changing sentiment can be as game changing as using cause/effect analysis.

Utilizing step 1, if I learned you love Madonna, I would try to find a Madonna concert I can get you tickets to. Or I would buy an autographed Madonna album on eBay and mail it to you.

It’s true that money can’t buy everything. Sometimes understanding the sentimental value of things, particularly the value individuals place on certain items, allows you to get a better understanding of how to change moods positively. Typically what people are missing isn’t work related, so you’ll have to think outside the box.

Step #4: Create a Sense of Urgency

Now that you have the other party interested in your product or service, you need them to move fast. The best way to do this is to create a sense or urgency. Playing on the idea of supply and demand can have great results. Terms like: limited supplies, limited time only, and while quantities last put pressure for you to move quick.

The pitch I usually make is that we only have one opening to take on a new enterprise customer and that it will be filled within the next 30 days.

When creating a sense of urgency make sure you aren’t lying, because it can backfire. When I tell companies that I only have one opening, I mean it! Yes, I can take on more customers in the future, but that involves scaling my company… which takes time.

Step #5: Turn the Tables

Although this is the last step, in many ways it is the most important step. Not only will it determine the size of the deal, but it also determines if you will be able to close the deal.

With most business deals you’re the one pitching, which naturally gives the other party the upper hand. And when they have the upper hand they won’t just make you earn the deal, but they’ll squeeze you on the price. This will make the deal less lucrative for you.

Leveraging step 4, by creating a sense of urgency, is the best way to turn the tables. Here is what I typically say to turn the tables:

As you already know, I only have an opening for one client. I only want to work with companies who are doing fun, exciting, and revolutionary things. Why should I choose to work with you?

Believe it or not you’ll get a response, and it’s typically one that defends how great their company is. In essence they are now pitching you on why you have to work with them. Now when you send them a proposal they’ll be more likely to sign a deal.
Conclusion

Following these steps won’t help you sell that single red cup, but it can help you close big deals. At first you may struggle at closing big deals, but with some practice you’ll get good at it.

If I was able to close 6 figure deals while I was in high school, there is no reason why you can’t do it as well. Try it out and let me know what you think.

Monday, June 13, 2011

Let's work backwards from this: Tell your sales people they are forbidden to do a "check in" with their prospects or clients. e.g. "HI ___; just "checking in". Honestly, it has zero value to the buyer and is frankly, embarassing. People rarely "check in" in their personal life unless someone is sick. The sales person is implying they have nothing to offer or they think they have the right to start the conversation off with this so the buyer can update him/her. No thanks.

Want to know why you aren't getting a response or moving a deal along? " Checking in" is one reason.

Here are ways to avoid the "check in":

1. Sales Intelligence -- there is a lot of information about your clients. Doing 5 minutes of research will provide clues into what your approach should be. The sales reps who emailed to congratulate me when they read I won an award -- memorable.

2. Sales Intelligence Part II: Trigger Events -- this is Tibor Shanto and Craig Elias rallying cry and it makes sense. There are events that happen in a decision maker's business life that are reasons to not just "check in" but go sell. Here is an example: decision maker just announced that they need to double revenue this year.

3. Content -- there is an un-named sales person who "checks in" with me by sending me relevant content offerings. By the way, she sends blog posts from people unrelated to her company! She is trying to check in by offering me something that makes a difference in my life. She is creating a trusting, memorable relationship with me. Oh and by the way, I will sometimes write back (unlike the "check in" emails I receive).

Now, some may say "But there is a reason to 'check in' during the sales cycle". Typically, the sales person who "checks in" has lost control of a deal. They don't know what is going on and need to find out more.

1. Always mutually agree on a next step or deliverable -- if you leave a call without some type of agreement, you will be FORCED to "check in". I have heard stories in the old days of enterprise sales reps bringing calendars into sales meetings to create a time line with the prospect. I like that, you know have something the prospect has agreed to allow you to ask for. If you "check in", I don't have to get back to you. If I owe you something, then I owe you a response.

2. Don't be such a wimp -- this is a business relationship, don't use the "check-in" as a way to be passive-aggressive. Ask for what you want. If someone is supposed to send you their requirements, ask for that.

Thursday, June 9, 2011

Interviewing is broken. Has been for years. This rigid commitment everyone seems to have to the standard resume/cover letter/interview system of hiring is just plain insane.

I've been fascinated by hiring processes for years. Hiring great talent is such a massively tough challenge, and I see so few companies that do it well. Even the best companies hide a deep dark secret: their hiring processes don't predict success accurately. It's long been whispered that Google's sophisticated HR scoring system has little correlation with an employee's success at the company. One management consultant for a top firm told me recently that, despite incredible efforts to improve hiring analytics, the best predictor of success for junior employees was still just their SAT scores.

Paul English, one of the absolute best said this about his style of hiring at Kayak:

"At times, I've fired maybe one out of every three people I've hired. That might make people think I'm bad at hiring, but I think I'm quite good at hiring."

So, Paul English, one of the most respected out there, gets 1 out of 3 wrong? Shit. This stuff is hard. But Kayak is at a stage of development where the organization can sustain the disruption of people leaving. Most startups I know have such difficulty firing because everything is already so unstable. Can't fire during a product launch. Can't fire during a funding round. Let's give him 3 more months and see if things improve...

I don't claim to be good at hiring, but I do have a particular style that I learned from some advisors.

I never actually interview people. Ever.

I think of hiring as mutual courting. The only way to court in a work setting is to spend time working together. Whenever I'm thinking of hiring someone, whether entry-level or senior, we do a project together. I pay them a reasonable contractor fee for the work, and I make sure it's the type of work that's easily definable, has clear deliverables, and lasts a few weeks.

Sometimes we do this process and the project goes outstandingly well, and we make a full-time offer. Our ability at this point to define a job description and compensation package is remarkably easy. We know what we're getting. The employee is also motivated at this point because we've all proven ourselves to each other. He's learned the real strengths and weaknesses of the business and of working with the team. A decision to accept a full-time offer at this point is a well-informed one.

Sometimes, the project turns out only so-so, at which point we wish the very best to the applicant and do whatever we can to help him find a role that is perfectly suited for him. There's no termination paperwork, no 6 months of trying to make it work, no awkward conversations about his progress behind closed doors.

Sometimes, a talented person can't, for whatever reason, commit to a 3 week project. But maybe there's a smaller project he can do over nights and weekends. Maybe there's an open source project of mutual interest. Maybe he can take 3 days off his oyher job and work half a week and a weekend with us. If it's a student, maybe he can join us for part of spring break. And if none of that works, then well, we can't hire him. And we wish him well and do our best to refer him to a company that will work.

But what we don't ever do is engage in some interview/code puzzle/awkward question process that has nothing to do with what it's really like to work with us.

Courting great people, working together temporarily as contractors, and then only engaging in full employment when everything proves out as hoped--that's the way to go. This method is spreading throughout the startup world, and I think it's good for everyone involved. Most of the BigCo business world doesn't work this way. Most larger companies have HR departments that hire through a more formal process. I would guess that BigCo Inc. could actually be far more flexible than it currently is, but that's out of my scope of expertise. I know for certain that startups can be more creative (and less insane) in their hiring practices...and they should.

Monday, June 6, 2011

They have become the key influencers and companies must remember that when they are trying to win people over to their ideas, products and services.

That’s the advice from Guy Kawasaki, managing director of Garage Technology Ventures who, as one of the employees behind Apple’s marketing of the Macintosh, pioneered evangelism back in 1984, turning consumers into avid advocates for the brand.

Kawasaki, who was in Vancouver last week for the Internet Marketing conference, shared his formula for “changing hearts, minds and actions.”

It all boils down to one word: “enchantment.”

“If you can change people’s hearts, minds and actions, you can change the world,” said Kawasaki, a venture capitalist, a columnist with Entrepreneur Magazine and author of nine books on marketing and entrepreneurship.

While old-school marketing saw companies seeking to enchant those they figured had the power to influence, social media has made that practice obsolete. “I think marketing is completely reversed,” Kawasaki said.

It used to be that companies sought favourable reviews from influential publications like Fortune and The Wall Street Journal, but today’s consumers are more likely to be influenced by blogs or by the Twitter users they follow.

“The new way is that nobodies are the new somebodies,” said Kawasaki.

Instead of top-down delivery, marketing happens from the bottom up, he said. “Someone you’ve never heard of embraces your product, they love the product and they spread the word. You never know which mommy blogger is going to make your product successful.”

Enchantment is more than a smile and scintillating conversation. Here are some more of Kawasaki’s tips on becoming enchanting:

1. Always default to a yes attitude. Kawasaki attributes this bit of advice to Vancouver’s Darcy Rezac, author of Work the Pond! Use the Power of Positive Networking.

2. You can’t enchant people if you’re not trustworthy. And if you want people to trust you, you have to trust them. Companies like Zappos, with its paid shipping return policy, are examples of how it can pay off to trust customers. Be a mensch, someone who can be trusted, who is honourable and has a world perspective. Think Nelson Mandela if you’re looking for an example.

3. Deliver a product or service that meets the enchantment test: Is it DICEE? Deep, intelligent, complete, empowering and elegant.

“It is easy to enchant people with something that is great; it’s hard to enchant people with something that is crap,” said Kawasaki, who points to Google as one company that meets that DICEE test.

4. Conduct a pre-mortem before you launch. Gather your team together and say, ‘Let’s assume our product failed and come up with the reasons why it failed.’ When you’re creating something, it’s very difficult to poke holes in it; this exercise is aimed at identifying the shortcomings without having the team at odds with one another.

5. Sell your dream. The iPhone is really $188 worth of parts and AT&T (at least in the U.S.) but Apple sells the dream, the smart phone that changes your life.

7. Rules of e-mail: Have a great subject line and a message that is no longer than five sentences and includes what you want, what your cause is, who you are, why the recipient should help you and what the next step is.

8. Use Twitter, the greatest marketing tool ever created, according to Kawasaki. Have a good avatar, no red eyes or out-of-focus photos; remember your profile is in a sense your resume, so make it good and when you tweet, provide interesting links.

About Me

As a Management Consultant working with Start Up's and Small/Medium size businesses, this forum is to share experiences from the front lines on sales, marketing, people talent, interviewing, sales management and other business related topics.
www.IndigoOceans.com